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Lakeland Bancorp Announces First Quarter Results and Increases Cash Dividend 9%

OAK RIDGE, N.J., April 29, 2019 (GLOBE NEWSWIRE) -- Lakeland Bancorp, Inc. (NASDAQ: LBAI) (the “Company”), the parent company of Lakeland Bank (“Lakeland”), reported net income of $15.6 million and earnings per diluted share ("EPS") of $0.31 for the three months ended March 31, 2019 versus net income of $15.3 million and EPS of $0.32 for the prior year quarter. Excluding merger-related expenses pertaining to the Company’s January 2019 acquisition of Highlands Bancorp, Inc. ("Highlands") of $2.1 million, tax-effected, net income for the first quarter of 2019 was $17.8 million, or $0.35 per diluted share.

For the first quarter of 2019, annualized return on average assets was 1.02%, annualized return on average common equity was 9.41% and annualized return on average tangible common equity was 12.32%. Excluding merger-related expenses these ratios were 1.17%, 10.71% and 14.01%, respectively.

The acquisition of Highlands, completed on January 4, 2019, added $496.9 million in total assets, $428.1 million in total loans and $409.6 million in total deposits. Goodwill totaled $17.7 million and core deposit intangibles were $3.7 million. The Company’s financial statements reflect the impact of the merger from the date of acquisition, which should be considered when comparing periods.

Thomas Shara, Lakeland Bancorp’s President and CEO commented, "We’re excited to complete the Highlands Bancorp acquisition this quarter and welcome the Highlands customers and shareholders to the Lakeland family. Another highlight is our successful completion the Highlands core conversion to our systems and additional services their customers will benefit from as part of a larger institution. Lakeland continues to carefully grow our assets in a very competitive environment and as a sign of continued confidence, our Board increased the annual cash dividend from $0.46 to $0.50 per share."

Net Interest Margin and Income

Net interest margin for the first quarter of 2019 of 3.42% increased three basis points from the first quarter of 2018 and 13 basis points from the fourth quarter of 2018. The increase in net interest margin from the prior quarter was due to the continued increase in loan portfolio yield as a result of the origination of higher yielding loans and $1.0 million of accretion income on Highlands' loans and deposits.

The yield on interest-earning assets for the first quarter of 2019 was 4.44% compared to 4.02% for the first quarter of 2018 and 4.20% for the fourth quarter of 2018. The increase in yield from the prior quarter was a result of originating higher yielding loans, $787,000 in accretion income on loans and higher investment securities yields.

The cost of interest-bearing liabilities for the first quarter of 2019 was 1.34% compared to 0.83% for the first quarter of 2018 and 1.21% for the fourth quarter of 2018. The cost of interest-bearing transaction accounts, time deposits and borrowings have increased since the first quarter of 2018 largely driven by competitive pressures and higher market interest rates.

Net interest income increased to $48.6 million for the first quarter of 2019 compared to $42.2 million for the first quarter of 2018, due primarily to the growth of interest-earning assets and increases in loan yields, partially offset by an increase in interest-bearing liabilities and higher interest rates on deposits and borrowings.

Noninterest Income

Noninterest income increased $389,000 to $5.7 million for the first quarter of 2019 from $5.3 million for the first quarter of 2018. The Company recorded a $353,000 gain on equity securities in the first quarter of 2019 compared to a loss of $18,000 during the same period in 2018. In addition, commissions and fees increased $140,000 compared to the first quarter of 2018 due primarily to an increase in investment services income, while gains on sales of loans increased $125,000. Other income decreased $173,000 due primarily to a decrease in loan swap income.

Noninterest Expense

Noninterest expense totaled $34.0 million for the first quarter of 2019 compared to $27.1 million for the first quarter of 2018. Excluding $2.9 million in pre-tax merger related expenses, noninterest expense increased $4.0 million primarily due to salary and employee benefit expense increasing $2.4 million as a result of additions to our staff from the Highlands merger, normal merit increases and higher benefit costs. In the first quarter of 2019, data processing expense increased $861,000 compared to the first quarter of 2018 due primarily to the Company’s expansion and improvement of its digital infrastructure. Net occupancy expense and core deposit intangible amortization increased $216,000 and $147,000, respectively, due primarily to the Highlands merger.

Income Tax Expense

The effective tax rate for the first quarter of 2019 was 21.2% compared to 20.3% for the same period last year.

Financial Condition

At March 31, 2019, total assets were $6.37 billion, an increase of $559.0 million, including $496.9 million from Highlands compared to December 31, 2018. Total loans grew $464.2 million, including $428.1 million from Highlands, to $4.92 billion and investment securities increased $29.2 million, including $24.5 million from Highlands, to $850.7 million. On the funding side, total deposits increased $443.9 million, including $409.6 million from Highlands, to $5.06 billion, while borrowings increased $35.2 million, including $41.0 million from Highlands to $555.2 million. At March 31, 2019, total loans as a percent of total deposits was 97.2%.

Asset Quality

At March 31, 2019, non-performing assets totaled $16.4 million, 0.26% of total assets, compared to $13.0 million, 0.22% of total assets, at December 31, 2018. Non-accrual loans as a percent of total loans equaled 0.32% at March 31, 2019 compared to 0.27% at December 31, 2018. The allowance for loan losses increased to $38.0 million, 0.77% of total loans, at March 31, 2019, compared to $37.7 million, 0.84% of total loans, at December 31, 2018. The Company's allowance for loan losses excluding acquired loans would be 0.91%. In the first quarter of 2019, the Company had net charge-offs of $217,000, 0.02% of average loans, annualized, compared to net charge-offs of $1.1 million, 0.10% of average loans, annualized, for the same period in 2018. The first quarter of 2019 provision for loan losses was $508,000 compared to $1.3 million in the first quarter of 2018.

Capital

At March 31, 2019, stockholders' equity was $681.3 million compared to $623.7 million at December 31, 2018, a 9% increase. Lakeland Bank remains above FDIC “well capitalized” standards, with a Tier 1 Leverage Ratio of 9.23% at March 31, 2019. The book value per common share and tangible book value per common share increased 9.0% and 9.2% to $13.51 and $10.35, respectively,  compared to $12.40 and $9.48 at March 31, 2018. On April 25, 2019, the Company increased the quarterly cash dividend by $0.01 per share, or 9% to $0.125 per share to be paid on May 17, 2019 to shareholders of record as of May 9, 2019.

Forward-Looking Statements

The information disclosed in this document includes various forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipates”, “projects”, “intends”, “estimates”, “expects”, “believes”, “plans”, “may”, “will”, “should”, “could”, and other similar expressions are intended to identify such forward-looking statements. The Company cautions that these forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from such forward-looking statements. The following factors, among others, could cause actual results to differ materially and adversely from such forward-looking statements: changes in the financial services industry and the U.S. and global capital markets, changes in economic conditions nationally, regionally and in the Company’s markets, the nature and timing of actions of the Federal Reserve Board and other regulators, the nature and timing of legislation and regulation affecting the financial services industry, government intervention in the U.S. financial system, changes in federal and state tax laws, changes in levels of market interest rates, pricing pressures on loan and deposit products, credit risks of the Company’s lending and leasing activities, successful implementation, deployment and upgrades of new and existing technology, systems, services and products, customers’ acceptance of the Company’s products and services, competition and failure to realize anticipated efficiencies and synergies from the merger of Highlands Bancorp, Inc. into Lakeland Bancorp and the merger of Highlands State Bank into Lakeland Bank. Any statements made by the Company that are not historical facts (including statements regarding anticipated synergies from the Highlands Bancorp and Highlands State Bank mergers and regarding positioning for 2019) should be considered to be forward-looking statements. The Company is not obligated to update and does not undertake to update any of its forward-looking statements made herein.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. Specifically, the Company provides measures based on what it believes are its operating earnings on a consistent basis, and excludes material non-routine operating items which affect the GAAP reporting of results of operations. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company also provides measurements and ratios based on tangible equity and tangible assets. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

The Company also uses an efficiency ratio that is a non-GAAP financial measure. The ratio that the Company uses excludes amortization of core deposit intangibles, provision for unfunded lending commitments and, where applicable, long-term debt prepayment fees and merger related expenses. Income for the non-GAAP ratio is increased by the favorable effect of tax-exempt income and excludes gains and losses from the sale of investment securities and gain on debt extinguishment, which can vary from period to period. The Company uses this ratio because it believes the ratio provides a relevant measure to compare the operating performance period to period.

These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. See accompanying non-GAAP tables.

About Lakeland

Lakeland Bancorp, Inc. (LBAI) has approximately $6.37 billion in total assets. Lakeland Bank, a wholly-owned subsidiary of Lakeland Bancorp, Inc., operates 53 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey including one branch in Highland Mills, New York; five New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Teaneck and Waldwick; and one New York commercial lending center to serve the Hudson Valley region. Lakeland also has a commercial loan production office serving Middlesex and Monmouth counties in New Jersey.  Lakeland Bank offers an extensive suite of financial products and services for businesses and consumers. Visit LakelandBank.com for more information.

Thomas J. Shara
President & CEO

Thomas F. Splaine
EVP & CFO
973-697-2000


Lakeland Bancorp, Inc.
Consolidated Statements of Income
(Unaudited)
       
    Three Months Ended
March 31,
(Dollars in thousands, except per share amounts) 2019 2018
       
INTEREST INCOME    
Loans and net deferred fees and costs $ 57,642   $ 45,544  
Federal funds sold and interest-bearing deposits with banks 254   166  
Taxable investment securities and other 4,873   3,992  
Tax exempt investment securities 408   443  
  TOTAL INTEREST INCOME 63,177   50,145  
INTEREST EXPENSE    
Deposits 11,497   5,755  
Federal funds purchased and securities sold under agreements to repurchase 608   134  
Other borrowings 2,466   2,020  
  TOTAL INTEREST EXPENSE 14,571   7,909  
NET INTEREST INCOME 48,606   42,236  
Provision for loan losses 508   1,284  
  NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 48,098   40,952  
NONINTEREST INCOME    
Service charges on deposit accounts 2,573   2,611  
Commissions and fees 1,412   1,272  
Income on bank owned life insurance 683   719  
Gain (loss) on equity securities 353   (18 )
Gains on sales of loans 371   246  
Other income 331   504  
  TOTAL NONINTEREST INCOME 5,723   5,334  
NONINTEREST EXPENSE    
Salaries and employee benefit expense 19,231   16,861  
Net occupancy expense 2,954   2,738  
Furniture and equipment expense 2,116   2,206  
FDIC insurance expense 450   425  
Stationary, supplies and postage expense 447   416  
Marketing expense 469   361  
Data processing expense 1,327   466  
Telecommunications expense 493   421  
ATM and debit card expense 602   510  
Core deposit intangible amortization 304   157  
Other real estate owned and other repossessed assets expense 86   46  
Merger related expenses 2,860    
Other expenses 2,645   2,530  
  TOTAL NONINTEREST EXPENSE 33,984   27,137  
INCOME BEFORE PROVISION FOR INCOME TAXES 19,837   19,149  
Provision for income taxes 4,211   3,894  
NET INCOME $ 15,626   $ 15,255  
       
EARNINGS PER COMMON SHARE:    
  Basic $ 0.31   $ 0.32  
  Diluted $ 0.31   $ 0.32  
DIVIDENDS PAID PER COMMON SHARE $ 0.115   $ 0.100  


Lakeland Bancorp, Inc.
Consolidated Balance Sheets
       
(Dollars in thousands) March 31, 2019   December 31, 2018
  (Unaudited)    
ASSETS      
Cash $ 205,322     $ 205,199  
Interest-bearing deposits due from banks 21,037     3,400  
  Total cash and cash equivalents 226,359     208,599  
Investment securities available for sale, at fair value 659,238     638,618  
Equity securities, at fair value 15,232     15,921  
Investment securities held to maturity; fair value of $158,219 at March 31,
2019 and $150,932 at December 31, 2018
159,308     153,646  
Federal Home Loan Bank and other membership stocks, at cost 16,951     13,301  
Loans held for sale 600     1,113  
Loans, net of deferred fees 4,921,391     4,456,733  
Allowance for loan losses (37,979 )   (37,688 )
         Net loans 4,883,412     4,419,045  
Premises and equipment, net 51,703     49,175  
Operating lease right-of-use assets
19,239      
Accrued interest receivable 17,515     16,114  
Goodwill 154,153     136,433  
Other identifiable intangible assets 5,192     1,768  
Bank owned life insurance 110,430     110,052  
Other assets 45,731     42,308  
     TOTAL ASSETS $ 6,365,063     $ 5,806,093  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
LIABILITIES      
Deposits:      
Noninterest-bearing $ 1,071,890     $ 950,218  
Savings and interest-bearing transaction accounts 3,046,322     2,913,414  
Time deposits $250 thousand and under 736,957     589,737  
Time deposits over $250 thousand 209,415     167,301  
        Total deposits 5,064,584     4,620,670  
Federal funds purchased and securities sold under agreements to repurchase 261,266     233,905  
Other borrowings 175,783     181,118  
Subordinated debentures 118,193     105,027  
Operating lease liabilities 20,823      
Other liabilities 43,071     41,634  
     TOTAL LIABILITIES 5,683,720     5,182,354  
       
STOCKHOLDERS' EQUITY      
Common stock, no par value; authorized 100,000,000 shares at March 31,
2019 and at December 31, 2018; issued shares 50,435,663 at
March 31, 2019 and 47,486,250 shares at December 31, 2018
558,245     514,703  
Retained earnings 126,787     116,874  
Accumulated other comprehensive loss (3,689 )   (7,838 )
     TOTAL STOCKHOLDERS' EQUITY 681,343     623,739  
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,365,063     $ 5,806,093  


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  March 31, Dec 31, Sept 30, June 30, March 31,
(Dollars in thousands, except per share data) 2019 2018 2018 2018 2018
           
INCOME STATEMENT          
Net interest income $ 48,606   $ 44,206   $ 43,624   $ 43,493   $ 42,236  
Provision for loan losses (508 ) (591 ) (1,046 ) (1,492 ) (1,284 )
Gains on sales of loans 371   299   484   300   246  
Gain (loss) on equity securities 353   (199 ) (439 ) 73   (18 )
Other noninterest income 4,999   5,528   5,594   5,336   5,106  
Merger related expenses (2,860 ) (464 )      
Other noninterest expense (31,124 ) (28,199 ) (27,793 ) (27,574 ) (27,137 )
  Pretax income 19,837   20,580   20,424   20,136   19,149  
Provision for income taxes (4,211 ) (5,030 ) (3,666 ) (4,298 ) (3,894 )
  Net income $ 15,626   $ 15,550   $ 16,758   $ 15,838   $ 15,255  
           
Basic earnings per common share $ 0.31   $ 0.32   $ 0.35   $ 0.33   $ 0.32  
Diluted earnings per common share $ 0.31   $ 0.32   $ 0.35   $ 0.33   $ 0.32  
Dividends paid per common share $ 0.115   $ 0.115   $ 0.115   $ 0.115   $ 0.100  
Dividends paid $ 5,838   $ 5,510   $ 5,510   $ 5,509   $ 4,778  
Weighted average shares - basic 50,275   47,605   47,605   47,600   47,503  
Weighted average shares - diluted 50,442   47,780   47,788   47,770   47,736  
           
SELECTED OPERATING RATIOS          
Annualized return on average assets 1.02 % 1.08 % 1.19 % 1.17 % 1.14 %
Annualized return on average common equity 9.41 % 10.05 % 11.02 % 10.71 % 10.60 %
Annualized return on average tangible common equity (1) 12.32 % 12.98 % 14.31 % 13.97 % 13.90 %
Annualized net interest margin 3.42 % 3.29 % 3.32 % 3.43 % 3.39 %
Efficiency ratio (1) 56.62 % 56.18 % 56.00 % 55.60 % 56.58 %
Common stockholders' equity to total assets 10.70 % 10.74 % 10.80 % 10.80 % 10.75 %
Tangible common equity to tangible assets (1) 8.41 % 8.57 % 8.55 % 8.51 % 8.43 %
Tier 1 risk-based ratio 10.98 % 11.26 % 11.21 % 11.16 % 11.08 %
Total risk-based ratio 13.48 % 13.71 % 13.69 % 13.67 % 13.61 %
Tier 1 leverage ratio 9.23 % 9.39 % 9.42 % 9.43 % 9.28 %
Common equity tier 1 capital ratio 10.38 % 10.62 % 10.56 % 10.49 % 10.40 %
Book value per common share $ 13.51   $ 13.14   $ 12.79   $ 12.59   $ 12.40  
Tangible book value per common share (1) $ 10.35   $ 10.22   $ 9.88   $ 9.67   $ 9.48  
           
(1) See Supplemental Information - Non-GAAP Financial Measures        


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  March 31, Dec 31, Sept 30, June 30, March 31,
(Dollars in thousands) 2019 2018 2018 2018 2018
           
SELECTED BALANCE SHEET DATA AT PERIOD-END        
Loans $ 4,924,671   $ 4,460,447   $ 4,332,238   $ 4,281,302   $ 4,228,052  
Allowance for loan losses 37,979   37,688   37,293   36,604   35,644  
Investment securities 850,729   821,486   801,315   798,096   805,654  
Total assets 6,365,063   5,806,093   5,627,057   5,534,488   5,477,829  
Total deposits 5,064,584   4,620,670   4,642,443   4,400,019   4,447,965  
Short-term borrowings 261,266   233,905   47,398   197,870   126,485  
Other borrowings 293,976   286,145   289,635   301,339   281,906  
Stockholders' equity 681,343   623,739   607,555   597,864   588,648  
           
LOANS          
Commercial, real estate $ 3,769,545   $ 3,377,324   $ 3,281,946   $ 3,222,461   $ 3,169,375  
Commercial, industrial and other 389,230   336,735   334,241   339,974   339,665  
Equipment financing 90,791   87,925   82,881   82,006   78,238  
Residential mortgages 335,290   329,854   315,135   321,717   323,054  
Consumer and home equity 339,815   328,609   318,035   315,144   317,720  
  Total loans $ 4,924,671   $ 4,460,447   $ 4,332,238   $ 4,281,302   $ 4,228,052  
           
DEPOSITS          
Noninterest-bearing $ 1,071,890   $ 950,218   $ 996,296   $ 967,911   $ 974,641  
Savings and interest-bearing transaction accounts 3,046,322   2,913,414   2,855,318   2,625,325   2,682,726  
Time deposits 946,372   757,038   790,829   806,783   790,598  
  Total deposits $ 5,064,584   $ 4,620,670   $ 4,642,443   $ 4,400,019   $ 4,447,965  
           
Total loans to total deposits ratio 97.2 % 96.5 % 93.3 % 97.3 % 95.1 %
           
SELECTED AVERAGE BALANCE SHEET DATA          
Loans $ 4,871,534   $ 4,393,382   $ 4,296,244   $ 4,247,443   $ 4,194,207  
Investment securities 858,046   823,193   811,217   811,361   821,055  
Interest-earning assets 5,772,853   5,346,934   5,221,612   5,094,048   5,062,628  
Total assets 6,183,224   5,694,827   5,570,286   5,437,540   5,409,409  
Noninterest-bearing demand deposits 1,056,060   1,003,508   999,217   969,965   964,498  
Savings deposits 513,270   483,606   491,095   496,630   487,666  
Interest-bearing transaction accounts 2,554,865   2,446,325   2,319,863   2,195,553   2,240,044  
Time deposits 890,070   769,129   789,691   792,270   761,418  
Total deposits 5,014,265   4,702,568   4,599,866   4,454,418   4,453,626  
Short-term borrowings 128,972   50,196   36,702   73,305   55,137  
Other borrowings 306,529   288,126   291,477   283,206   283,645  
Total interest-bearing liabilities 4,393,706   4,037,382   3,928,828   3,840,964   3,827,910  
Stockholders' equity 673,205   613,583   603,059   593,388   583,700  


Lakeland Bancorp, Inc.
Financial Highlights
(Unaudited)
           
  For the Quarter Ended
  March 31, Dec 31, Sept 30, June 30, March 31,
(Dollars in thousands) 2019 2018 2018 2018 2018
           
AVERAGE ANNUALIZED YIELDS (TAXABLE EQUIVALENT BASIS)      
ASSETS          
Loans 4.80 % 4.58 % 4.54 % 4.50 % 4.40 %
Taxable investment securities and other 2.49 % 2.44 % 2.26 % 2.21 % 2.17 %
Tax-exempt securities 2.74 % 2.74 % 2.71 % 2.66 % 2.65 %
Federal funds sold and interest-bearing cash accounts 2.35 % 2.19 % 1.87 % 1.65 % 1.40 %
  Total interest-earning assets 4.44 % 4.20 % 4.14 % 4.12 % 4.02 %
           
LIABILITIES          
Savings accounts 0.07 % 0.06 % 0.06 % 0.06 % 0.06 %
Interest-bearing transaction accounts 1.18 % 1.04 % 0.89 % 0.69 % 0.61 %
Time deposits 1.79 % 1.79 % 1.61 % 1.34 % 1.23 %
Borrowings 2.82 % 2.65 % 2.66 % 2.51 % 2.54 %
  Total interest-bearing liabilities 1.34 % 1.21 % 1.08 % 0.91 % 0.83 %
Net interest spread (taxable equivalent basis) 3.10 % 2.99 % 3.06 % 3.21 % 3.19 %
           
Annualized net interest margin (taxable equivalent basis) 3.42 % 3.29 % 3.32 % 3.43 % 3.39 %
Annualized cost of deposits 0.93 % 0.84 % 0.73 % 0.59 % 0.52 %
           
ASSET QUALITY DATA          
ALLOWANCE FOR LOAN LOSSES          
Balance at beginning of period $ 37,688   $ 37,293   $ 36,604   $ 35,644   $ 35,455  
Provision for loan losses 508   591   1,046   1,492   1,284  
Charge-offs (516 ) (381 ) (753 ) (963 ) (1,250 )
Recoveries 299   185   396   431   155  
  Balance at end of period $ 37,979   $ 37,688   $ 37,293   $ 36,604   $ 35,644  
           
NET LOAN CHARGE-OFFS (RECOVERIES)          
Commercial, real estate $ 67   $ 132   $ (115 ) $ 181   $ (13 )
Commercial, industrial and other 50   (44 ) (26 ) 213   992  
Equipment financing 85   28   366   69   21  
Residential mortgages 41   (2 ) 36   (3 ) 79  
Consumer and home equity (26 ) 82   96   72   16  
  Net charge-offs $ 217   $ 196   $ 357   $ 532   $ 1,095  
           
NON-PERFORMING ASSETS          
Commercial, real estate $ 9,817   $ 7,192   $ 5,737   $ 7,353   $ 6,204  
Commercial, industrial and other 2,202   1,019   1,189   1,171   1,505  
Equipment financing 383   501   441   834   250  
Residential mortgages 1,740   1,986   2,347   2,992   3,045  
Consumer and home equity 1,581   1,432   1,410   1,917   2,341  
  Total non-accrual loans 15,723   12,130   11,124   14,267   13,345  
Property acquired through foreclosure or repossession 715   830   2,754   2,184   1,392  
  Total non-performing assets $ 16,438   $ 12,960   $ 13,878   $ 16,451   $ 14,737  
           
Loans past due 90 days or more and still accruing $ 78   $   $ 16   $   $ 1  
Loans restructured and still accruing $ 6,352   $ 9,293   $ 9,030   $ 7,926   $ 9,526  
           
Ratio of allowance for loan losses to total loans 0.77 % 0.84 % 0.86 % 0.85 % 0.84 %
Total non-accrual loans to total loans 0.32 % 0.27 % 0.26 % 0.33 % 0.32 %
Total non-performing assets to total assets 0.26 % 0.22 % 0.25 % 0.30 % 0.27 %
Annualized net charge-offs (recoveries) to average loans 0.02 % 0.02 % 0.03 % 0.05 % 0.10 %


Lakeland Bancorp, Inc.
Supplemental Information - Non-GAAP Financial Measures
(Unaudited)
           
  At or for the Quarter Ended
  March 31, Dec 31, Sept 30, June 30, March 31,
(Dollars in thousands, except per share amounts) 2019 2018 2018 2018 2018
           
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE        
Total common stockholders' equity at end of period - GAAP $ 681,343   $ 623,739   $ 607,555   $ 597,864   $ 588,648  
Less:  Goodwill 154,153   136,433   136,433   136,433   136,433  
Less:  Other identifiable intangible assets 5,192   1,768   1,910   2,052   2,205  
  Total tangible common stockholders' equity at end of period - Non-GAAP $ 521,998   $ 485,538   $ 469,212   $ 459,379   $ 450,010  
           
Shares outstanding at end of period 50,436   47,486   47,485   47,484   47,476  
           
Book value per share - GAAP $ 13.51   $ 13.14   $ 12.79   $ 12.59   $ 12.40  
           
Tangible book value per share - Non-GAAP $ 10.35   $ 10.22   $ 9.88   $ 9.67   $ 9.48  
           
CALCULATION OF TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS        
Total tangible common stockholders' equity at end of period - Non-GAAP $ 521,998   $ 485,538   $ 469,212   $ 459,379   $ 450,010  
           
Total assets at end of period - GAAP $ 6,365,063   $ 5,806,093   $ 5,627,057   $ 5,534,488   $ 5,477,829  
Less:  Goodwill 154,153   136,433   136,433   136,433   136,433  
Less:  Other identifiable intangible assets 5,192   1,768   1,910   2,052   2,205  
  Total tangible assets at end of period - Non-GAAP $ 6,205,718   $ 5,667,892   $ 5,488,714   $ 5,396,003   $ 5,339,191  
           
Common equity to assets - GAAP 10.70 % 10.74 % 10.80 % 10.80 % 10.75 %
           
Tangible common equity to tangible assets - Non-GAAP 8.41 % 8.57 % 8.55 % 8.51 % 8.43 %
           
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON EQUITY        
Net income - GAAP $ 15,626   $ 15,550   $ 16,758   $ 15,838   $ 15,255  
           
Total average common stockholders' equity - GAAP $ 673,205   $ 613,583   $ 603,059   $ 593,388   $ 583,700  
Less:  Average goodwill 153,562   136,433   136,433   136,433   136,433  
Less:  Average other identifiable intangible assets 5,254   1,844   1,982   2,134   2,300  
  Total average tangible common stockholders' equity - Non-GAAP $ 514,389   $ 475,306   $ 464,644   $ 454,821   $ 444,967  
           
Return on average common stockholders' equity - GAAP 9.41 % 10.05 % 11.02 % 10.71 % 10.60 %
           
Return on average tangible common stockholders' equity - Non-GAAP 12.32 % 12.98 % 14.31 % 13.97 % 13.90 %
           
CALCULATION OF EFFICIENCY RATIO          
Total noninterest expense $ 33,984   $ 28,663   $ 27,793   $ 27,574   $ 27,137  
Amortization of core deposit intangibles (304 ) (142 ) (142 ) (153 ) (157 )
Merger related expenses (2,860 ) (464 )      
  Noninterest expense, as adjusted $ 30,820   $ 28,057   $ 27,651   $ 27,421   $ 26,980  
           
Net interest income $ 48,606   $ 44,206   $ 43,624   $ 43,493   $ 42,236  
Total noninterest income 5,723   5,628   5,639   5,709   5,334  
  Total revenue 54,329   49,834   49,263   49,202   47,570  
Tax-equivalent adjustment on municipal securities 108   109   113   114   118  
  Total revenue, as adjusted $ 54,437   $ 49,943   $ 49,376   $ 49,316   $ 47,688  
           
Efficiency ratio - Non-GAAP 56.62 % 56.18 % 56.00 % 55.60 % 56.58 %


Lakeland Bancorp, Inc.
Supplemental Information - Reconciliation of Net Income
(Unaudited)
  For the Quarter Ended
  March 31, March 31,
(Dollars in thousands, except per share amounts) 2019 2018
     
Net income - GAAP $ 15,626   $ 15,255  
     
NON-ROUTINE TRANSACTIONS, NET OF TAX    
Tax deductible merger related expenses 1,656    
Non-tax deductible merger related expenses 491    
  Net effect of non-routine transactions 2,147    
     
Net income available to common shareholders excluding non-routine transactions $ 17,773   $ 15,255  
Less:  Earnings allocated to participating securities (141 ) (141 )
Net Income,  excluding non-routine transactions $ 17,632   $ 15,114  
     
Weighted average shares - Basic 50,275   $ 47,503  
Weighted average shares - Diluted 50,442   $ 47,736  
     
Basic earnings per share - GAAP $ 0.31   $ 0.32  
Diluted earnings per share - GAAP $ 0.31   $ 0.32  
     
Basic earnings per share, adjusted for non-routine transactions $ 0.35   $ 0.32  
Diluted earnings per share, adjusted for non-routine transactions (Core EPS) $ 0.35   $ 0.32  
     
Return on average assets - GAAP 1.02 % 1.14 %
Return on average assets, adjusted for non-routine transactions 1.17 % 1.14 %
     
Return on average common stockholders' equity - GAAP 9.41 % 10.60 %
Return on average common stockholders' equity, adjusted for non-routine transactions 10.71 % 10.60 %
     
Return on average tangible common stockholders' equity - Non-GAAP 12.32 % 13.90 %
Return on average tangible common stockholders' equity - Non-GAAP, adjusted for
non-routine transactions
14.01 % 13.90 %